Platinum Investment (Asset) Management Limited 

Management Changes and lower FUMs: Platinum Asset Management Limited (ASX: PTM) has fallen 34.86% in last six months as on August 03, 2018. The company has appointed Andrew Clifford, Co-founder and Chief Investment Officer, as the new CEO of the company, effective from 1 July 2018. The group has also appointed Tim Trumper as Non-executive director to the board.
 
Moreover, the company’s funds under management (FUM) post-annual distribution to unit holders in June had fallen to $25,698.7 million from FUM of $27,748.2 million in May and this represents a slip of about 1.9% while it has been still up over 19% against prior corresponding period. In fact, the May month FUM were also a drop from $28,001.0 million reported as at April 2018. Weakness in FUMs has been noted over the last couple of months while underlying funds have recovered slightly, but the group has been impacted by performance of US stocks against emerging markets at a global level. 2018 has thus been comparatively a period of lull against 2017.
 
On the other hand, group’s ROE has been 29.8% as at December 2017 against the industry median of 4.5%. Nonetheless, the current ratio (total Current Assets by total Current Liabilities) has dropped from 20.20 as at June 2017 to 12.85 as at December 2017. Meanwhile, PTM stock is trading at a P/E of 16.36x. Based on the foregoing, we believe that it will be prudent to look for some catalysts before investing in the stock. We give an “Expensive” recommendation on the stock at the current price of $ 5.400 as we watch for relative performance of the funds that can impact net flows.


Funds Under Management (Source: Company Reports)

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